The UK Economic Secretary to the Treasury and banks have been criticised by MPs over Britain’s alleged role in a transnational money laundering scheme. However, closer examination shows that combating money laundering may not be as simple as MPs and other critics think.
The global fight against money laundering and financial crime continues unabated, albeit in different and often surprising forms and locations, as three disparate recent events have indicated. And cash, in the form of high-denomination bank notes, is being targeted.
Although the UK will implement the EU’s Fourth Money Laundering Directive, which was negotiated before the Brexit vote, a challenge lies ahead in dealing with the European Commission’s proposed amendments to the text of the Directive, some of which the UK does not support.
For fifteen years, efforts to tackle terrorist finance have been long on words and short on action. The recently published 2016 Regional Risk Assessment on Terrorism Financing 2016 for Southeast Asia and Australia suggests that at last global edicts are being operationalised locally.
The Financial Action Task Force, the inter-governmental standards authority on legal, regulatory and operational measures for combating money laundering and terrorist financing, agreed recently to suspend financial crime counter-measures against Iran for 12 months. Though well-intended, it reflects muddled thinking.
The debate over the Panama Papers has focused too much on the emotive issue of tax, and not enough on the issue of transparency. The UK is at the heart of the problem – but can also be at the heart of the solution.